This is excellent analysis from Mike Butcher of techcrunch. I give some insights from this long article which I read fully and found extremely useful and a link at the end ..
1) What advertising agencies wanted was in simple terms, where the value lay. And that’s exactly what Shields did.
2) “Shields was extremley really good at getting the slightly dim media buying agencies to automatically tell their clients that they just had to be on Bebo.”
3) It would be fair to say that many advertising agencies then – and even to some extent even now – don’t have a clue about the Web.
4) Media agencies found other social networks at the time far more complex to deal with. But “dealing with Bebo was very similar to traditional online buys. They got into agencies easily because of that. They just pitched exactly what you wanted to hear: audience, gowth, traffic, costs, and branding/textlinks packages. Simple.”
5) But in particular, Bebo did very well targeting the completely Web-clueless TV planning agencies, largely responsible for buying TV shows, not running the ROI numbers on a PPC web campaign.
6) Bebo was pitched as a kind of new-era TV network. The creation of the Kate Modern series. The partnership with media companies. All of it was cleverly designed to pull fat, undiscriminating ad budgets out of TV agencies.
7) Thus, once the agencies had been coaxed into singing the praises of Bebo to clients, brands starting to join in with the choir. The bandwagon started rolling. Bebo went on a media-savvy PR offensive the like of which has rarely been seen form a tech started.
8) Should Bebo be blamed? My agency contact thinks not. “I don;t blame Bebo as much as the agencies who don’t know how to engage with Bebo users, and made bad decisions. We are now moving away from a walled garden in social networks anyway. You don’t just have to be on one social network in the way we thought we did two years ago.”
9) They say: “Bebo was great at the time but no we are dissapointed because socnets are not about sending loads of taffic to a profile page. At the time it was fine, but people are now dissapointed. You don’t get ‘friended’ much as a brand. It’s not just about being inside one socnet but about being everywhere.”
10) Now, no-one is saying that Bebo lied about its figures. It’s merely that the people who were singing its praises just prior to the sale – the agencies, the media and the brands – did not have any kind of handle on Bebo’s key metrics like dwell time, engagement, demographics, you name it. So effectively AOL bought it for its agency and brand relationships, not the metrics, thinking that the metrics would get sorted out by Bebo’s growth.
11) A more obvious reason AOL is contemplating a Bebo sale is that it’s main business model has clearly switched to niche editorial sites, not social networks. Niche editorial is a direct driver for decent relationships with advertisers to offer close conversation with a core user group. It means you need to be really good at managing a portfolio of niches across a broad spectrum.
12) This month AOL launched MediaGlow, a formal business unit to organise the 75 sites in its publishing portfolio, which will grow to over 100 in the coming year.
A Year Later, AOL Is Contemplating A Bebo Sale